My colleague, Steve Saideman, has a thing about milk in bags. On Saideman's Semi-Spew he claims that, as compared to gallon milk jugs, they're an "inferior technology." They're not even good for the environment because "bags in which milk may be delivered have no other purpose. A gallon jug, on the other hand, has a vast array of re-purposes."
The "real superiority", Steve argues, of gallon jugs is their ease of use:
one can simply open a gallon jug of milk and pour. If you have bought bags of milk, you need to get a container, make sure it is clean, open the bag without spilling anything (no crying necessary with a gallon jug), pour it into the container and then pour some of the contents into one's bowl of cereal.
Steve, it turns out Canadians aren't the only ones using plastic bags. South Africans use them too. Photographic evidence is on the right.
Perhaps South Africa sells milk in bags because it too has a milk marketing board? Actually, South Africa's milk board was disbanded in 1994. According to the South African Milk Producers Association, "The South African dairy industry operates entirely according to free market principles."
I don't take the milk producers' claim entirely at face value, but let's say that there is enough competition in the industry that milk bags cannot be explained solely in terms of the South African milk industry's isolation from competitive pressures. So why do they exist?
I don't know, but here are two theories.
First, history matters. People who have grown up using milk bags find them easy and convenient to use (hint: don't pour the bag into another container; buy a purpose built milk-bag holder). Even if the milk board goes, the milk bags may stay.
Second, there are a fair number of people in South Africa who don't have much money. Milk bags use less materials than jugs, so are cheaper to make. Some people are willing to pay for convenience, some people aren't.
The cost-based argument is supported by the fact that South African jams, especially the more local flavours (e.g. melon and ginger) are often sold in cans, rather than glass jars.
The convenience of gallon jugs comes at a price - one that not everyone is willing to pay.
Update 1: Chris Auld wrote to Dan Wong of the BC Dairy Council and received this reply. Mr Wong explained that milk is not sold in bags in BC because of widespread cross-border shopping - consumers prefer milk sold in jugs, and be even more inclined to buy milk in the US if milk was not available in jugs in BC.
Update 2: A closer inspection of South African milk bags supports a price-discrimination type explanation. A one litre milk bags sells for 8 rand (around $1), a 2 litre milk jug sells for 20 rand (closer to $2.50). Given that the bag/jug cost differential is less than 50 cents, it seems likely that packaging types are being used as a way of getting those who are willing to pay more for milk to do so.